Austria's OMV may raise stake in Turkey's Petrol Ofisi

OMV is in talks with Turkey’s Dogan Holding to raise its stake in Petrol Ofisi and gain control of Turkey’s biggest fuel retailer as the Austrian company expands in faster growing markets. Dogan plans to sell part or all of its 54 percent in Petrol Ofisi, the Turkish company said Wednesday in a statement to the Istanbul Stock Exchange. Doğan’s stake in Petrol Ofisi is worth $1.4 billion, according to the current share price. OMV, central Europe’s biggest oil company, owns 42 percent of Petrol Ofisi, after initially paying $1.05 billion for 34 percent in 2006. “The company is expanding in emerging markets to tap faster growth in demand,” Bloomberg said. OMV in 2004 bought Romania’s biggest oil company, SNP Petrom, and in May purchased a stake in an Iraqi-based natural gas producer. “We feel very well prepared to take over control and to run this company under our leadership,” OMV Chief Executive Officer Wolfgang Ruttenstorfer said Wednesday in a Bloomberg Television interview. There’s no time pressure on the talks, the companies also said. As the news broke out, shares of Dogan Holding’s publicly traded companies, including Petrol Ofisi, Hurriyet Pazarlama and Doğan Media Group, soared. Petrol Ofisi closed the day at 6.85 Turkish Liras, rising 8.7 percent. Hurriyet Gazetecilik gained 3.6 percent to close at 1.33 liras, while Dogan Holding advanced 8.9 percent to 1.35 liras. Dogan Media Group gained 2 percent and closed at 1.52 liras, as Doğan Gazetecilik rose 0.9 percent to 2.21 liras. Milliyet Pazarlama climbed 2.15 percent to close at 95 kuruş. All Dogan shares were battered in March due to a tax dispute between the group and the government. Dogan Holding shares, which bottomed at 0.45 lira on March 19, gained nearly 200 percent since then. OMV, meanwhile, declined 2.4 percent in Vienna trading and was at 28.14 euros at 5:14 p.m. Turkish time. “We don’t think the market perceives positively that OMV invests at least 1 billion euros into the downstream business by acquiring the majority stake,” said Tamas Pletser, an analyst at ING Groep in Budapest, in a note to clients. “The Turkish retail market is lucrative with strong margins and high growth, but we think investors welcome an upstream acquisition rather than investing into lower margin downstream.” Pletser estimates that OMV has about 5 billion euros ($7.2 billion) of funds for acquisitions. A possible takeover of Petrol Ofisi may have “implications” for the Austrian company’s rating, Fitch said Wednesday. “The rating implications for OMV will depend on price, the funding structure and possible changes to future capital commitments that would ultimately determine the post-transaction financial profile,” said Josef Pospisil, director in Fitch’s Energy, Utilities and Regulation group. OMV doesn’t “purely see downstream business,” Ruttenstorfer said at a press conference. “We want to be active around Turkey, for instance with the investment in northern Iraq, for which the only close market is Turkey. For us Turkey is a strategic question, not simply of filling stations.” OMV on Wednesday reported that second-quarter net income fell 79 percent to 144 million euros. Excluding the cost of revaluing inventories, the company had an adjusted loss of 103 million euros before interest and taxes in refining and marketing, compared with a profit of 45 million euros a year earlier. Petrol Ofisi posted a 4.9 percent increase in second-quarter net income to 176.6 million liras ($121 million). Net income in the period was 176.6 million liras compared with 168.4 million liras a year earlier, the company said in a filing with the Istanbul Stock Exchange. Financial income more than doubled to 339.7 million liras in the period, while expenses from sales and marketing fell to 75.3 million liras from 85.3 million liras, the company said. “There is talk in the market that the sale price might be 30 percent higher than the market value,” said Orhan Canli, a trader at Is Investment in Istanbul, Turkey’s biggest broker. “Dogan will sell a large stake, or all of it.” Petrol Ofisi has 3,223 gas stations in Turkey where oil consumption grew 5.8 percent in 2008, according to BP’s annual world energy report. OMV in March sold its stake in Mol to Surgutneftegaz for 1.4 billion euros, booking a loss of 37 million euros. In August it abandoned a 2.8 trillion-forint ($13.5 billion) hostile takeover of Mol, Hungary’s largest refiner, after the European Union expressed competition concerns over the proposed acquisition.

Austria's OMV may raise stake in Turkey's Petrol Ofisi hurriyetdailynews.com Fri, Aug 7, 2009